Also in this letter:
■ Sam Bankman-Fried arrested in Bahamas on US charges
■ ETtech Explainer: Ransomware’s evolution from floppy disks to crypto
■ India’s wearables market to hit 117 million units in 2023, beat US
Byju’s lenders want quicker part-payment of $1.2-billion loan
A group of creditors to Byju’s has asked the company to immediately repay part of a $1.2 billion loan they recently bought into as they renegotiate terms of the debt, Bloomberg reported, citing people familiar with the matter.
The loan, priced at 550 points over Libor in November 2021, is one of the largest unrated term loan B offerings ever from a new-age company worldwide, according to JPMorgan Chase & Co, one of the deal’s bookrunners.
Last week, Bloomberg reported that the company was seeking to restructure the loan as it struggled with steep losses and meeting its cost reduction targets.
Details: The lenders have hired Houlihan Lokey Inc to advise them on amending covenants after Byju’s breached terms, including a September deadline for filing its results for the year ended March 31, 2022, the sources said. Rothschild & Co is representing Byju’s in the talks, they added.
Most of the lenders in this group bought the debt from primary holders in September, when the loan slumped to a record 64.5 cents, and are seeking to profit from accelerated repayment, two of the sources said.
Yes, but: A small group of creditors are still holding out asking the company to use its US unit’s cash reserves of about $850 million to prepay part of the year-old loan, the people said.
New terms: The renegotiated terms that Byju’s has already agreed with a majority of the lenders include providing monthly business updates, hiring a chief financial officer, and increasing the interest rate on the loan, the people said.
Sam Bankman-Fried arrested in Bahamas on US charges
FTX founder Sam Bankman-Fried was arrested in the Bahamas at the behest of the US on Monday (Tuesday morning India time), the day before he was due to testify before Congress about the abrupt failure of his cryptocurrency exchange – one of the world’s largest – last month.
Details: Bankman-Fried was arrested at his apartment complex, a luxury gated community called the Albany, and will appear in a magistrate court on Tuesday, Bahamian police said. The Bahamas attorney general’s office said it expects he will be extradited to the United States.
SBF’s testimony: The arrest came as Bankman-Fried prepared to lash out at his former lawyers at Sullivan and Cromwell, new FTX CEO John Ray, and rival crypto exchange Binance at a Congressional hearing.
In the testimony, a draft copy of which was seen by Reuters, he planned to say he was pressured by Sullivan and Cromwell lawyers to nominate Ray as CEO following the sudden exodus of customer funds. And when he changed his mind minutes later, following an offer of billions of dollars of fresh funding, he was told it was too late.
Yet, but: Bankman-Fried will now be unable to testify, according to Congresswoman Maxine Waters, who said in a statement she was surprised to hear of his arrest.
Binance in trouble? More trouble might be on the horizon for the crypto industry. Reuters reported that some US Justice Department prosecutors believe they have enough evidence in their investigation of Binance to charge the world’s largest cryptocurrency exchange and some top executives.
Also read: US SEC charges ex-FTX boss Sam Bankman-Fried with defrauding investors
ETtech Explainer: Ransomware’s evolution from floppy disks to crypto
India’s premier healthcare institution, All India Institute of Medical Sciences (AIIMS), was brought to its knees by a cyberattack on November 23, which crippled its systems and slowed the processing of patients. It was soon found that the institution had fallen prey to a ransomware attack, a form of digital crime that’s on the rise.
How it works: Ransomware attacks are carried out by installing malware in the target computer, which encrypts valuable data in the system.
Cybercriminals then demand a ransom – typically in cryptocurrency to ensure anonymity – to decrypt the data. Some kinds of ransomware malware don’t encrypt data, they simply lock down the target system to make it inaccessible.
Evolution: Such attacks have come a long way since the first known one in 1989, when a ransomware called the ’AIDS Trojan’ was installed on a floppy disk disguised as a document with information about the disease and sent to over 20,000 people by a scientist named Joseph Popp.
Three decades later, ransomware attacks are capable of crippling everything from hospitals to massive infrastructure projects, such as the Colonial Pipeline in the US.
India vulnerable: India is especially vulnerable to attacks on health organisations as it has no law mandating audits for healthcare systems and no data protection law.
Click here to read the full explainer.
India’s wearables market to hit 117 million units in 2023, beat US
Shipments of wearables are expected to reach 117 million units in India next year, from 100 million this year led by smartwatches and on the back of brands trying to crack the offline segment, bringing in new features and form factors.
This would make India the largest wearables market, surpassing the United States. However, despite the rise in shipments, India will trail China, industry executives told us.
By the numbers: The earwear segment grew 33.6% on-year in the third quarter of this year, according to IDC India, while the smartwatch segment grew at a whopping 178.8% in the same period.
Analysts also expect the rate of growth to fall sharply to 17% on-year from a steep 51% in 2022, amid worries of an economic downturn and an expected saturation of the audio accessories segment.
Smartwatch leader: A fortnight ago we reported – citing data from research firm Counterpoint – that India was the world’s biggest smartwatch market in the third quarter of 2022, thanks to highly affordable local products and the festive season demand.
Metaverse to be key enabler of Indian M&E sector: report
One of the key drivers of economic possibilities within the metaverse will be Web 3.0’s ability to spur digital transformation, according to a new Deloitte report titled ‘Metaverse: The Hype, Possibilities, and Beyond’.
Media & entertainment: “The metaverse will serve as a key enabler for the Indian media and entertainment sector opening newer avenues for India’s vast talent pool in engineering, graphics, video, and animation,” said Jehil Thakkar, Partner, and Media and Entertainment sector leader, Deloitte India.
Given India’s younger generation’s inclination towards technology consumption, the report anticipates an increase in demand for digital products, and immersive and elevated experiences. But it also cautioned that growth in metaverse adoption in India and elsewhere will depend on whether barriers to the underlying technology can be overcome.
Today’s ETtech Top 5 newsletter was curated by Zaheer Merchant in Mumbai and Gaurab Dasgupta in Delhi. Graphics and illustrations by Rahul Awasthi.
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